BPCL plans to invest Rs 45,000 crore in 5 years

BPCL plans to invest Rs 45,000 crore in its exploration and production business over the next five years. The aim is to staunch some of the bleeding from under-recoveries, which is expected to be more than last year's.

One area of focus will be the gas block in Mozambique, in which BPCL owns a stake. BPCL's stake in the block is valued at around Rs 15,000 crore, two-third of its current market cap of Rs 25,000 crore.

RK Singh, chairman, BPCL, says that Mozambique is another place where we have discovered gas and the discovery announced by the operator so far is between 30-60 TCF. And our share there is 10%. And that has been established and there the development activities have started and we expect that by 2017-18 we will start getting the gas and all other activities to develop the downstream facilities are in progress.

The company also plans to expand its E&P operations to Brazil and Indonesia. But the focus will not be purely international. On the cards is a large scale expansion at its Kochi refineries, which will see production capacity spike from the current 9.5 mmtpa, to 15.5 mmtpa.

Its refinery in Bina will also see capacity expand from six mmtpa to nine mmtpa. BPCL is banking on this expansion to not just produce auto fuels that conform to Euro-IV and Euro-V specifications, but also produce distillates and petcoke. It is also looking to rope in LG Chemicals and enter the petrochemical segment.

"We are also putting up a petrochemical complex. Based on propylene which will be produced by the expanded capacity and we are trying to put up a plant which is of a world scale," says Singh.

Internal accruals aside, BPCL plans to fund this mammoth capex drive by taking its E&P arm, Bharat Petroleum resources, public.